Interpretation on the basis for determining the purposes of a building and handling principles based on tax details with respect to a housing unit leased using a rental subsidy (Taiwan)

2018.11.19
Luke Hung

The Construction and Planning Agency issued the Ying-Shu-Zhai-1070087653 Circular of November 19, 2018 to interpret and clarify the basis for determining the purposes of a building and handling principles based on tax details with respect to a housing unit leased using a rental subsidy.

According to the Circular, Article 18, Paragraph 1, Subparagraph 2, Item 3 of the Regulations Governing Subsidies for Rents and Loan Interest for Self-constructed and Self-purchased Housing Units provides: “Housing units for which rental subsidies are applied shall meet the following requirements: …(1) If they are buildings not located in an industrial zone or on lands for Type B Buildings and their main purposes are registered as ‘commercial use,’ ‘office,’ ‘general office,’ ‘industrial or commercial service enterprise,’ ‘store’ or ‘retail enterprise,’ the housing taxes may be levied based on the home-use tax rate in their entirety as set forth in the housing tax bills or supporting documents issued by tax authorities, and it shall be determined that the buildings are for residential use in their entirety.” The legislative objective of the above provision is to conditionally ease relevant requirements by allowing a person renting a building registered for commercial and other purposes to apply for a rental subsidy with the building recognized by its “building number.”

Therefore, this Circular further explained that with respect to the building number of the four-story building rented by the applicant in this case, since the “entire building” was for residential use pursuant to the above requirement, the entire floor area of the building (all four stories) should be subject to housing taxes based on the home-use tax rate. Application of the home-use tax rate to the area rented by the applicant (who merely leased the second floor) only does not meet the above requirement.